Tablet makers hope for a comeback with wider 4G adoption

Tablet sales grew 22% in the quarter to June, compared to a year ago, to 1.07 million units, according to data by research firm IDC.Danish Khan | ET Bureau | September 01, 2015, 09:00 IST

Once the backbone of India's IT revolution, desktop PCs are set to lose the race to new-age tablets which will edge past the conventional computers this year.Tablet sales growth in the quarter to June has raised hopes in the industry that wider adoption of 4G technology could be the booster shot that the beleaguered segment needs. The surge in data consumption could drive tablet sales, said Faisal Kawoosa, lead analyst at CMR Telecoms Practice.

“Higher levels of data consumption will have a direct impact on factors such as device screen size, and tablets can provide users a conveniently bigger screen,” said Kawoosa. “This should give some hope to the industry that the market will revive as 4G data networks become widely available and accessed by users in more and more cities and towns.”

Bharti Airtel has launched 4G services in nearly 300 cities and towns, while Reliance Jio Infocomm and Vodafone India are expected to start similar high-speed broadband services by the end of the year and Idea is likely to roll out 4G services next year.

Tablet sales grew 22% in the quarter to June, compared to a year ago, to 1.07 million units, according to data by research firm IDC. This came after a 32.2% fall in the previous quarter. Tablet shipments fell nearly 9% in 2014, compared to the previous year, as per CMR, after a 56% jump in 2013.

Domestic firm iBall was the market leader during the quarter, followed by Korea’s Samsung, Datawind, Micromax and Xiaomi.

The growth came from adoption by the commercial or enterprise segment coupled with launches by local vendors and introduction of new devices by makers such as China’s Xiaomi. The postponement of the BIS certifications deadline on power adapters from May to a later date also helped boost sales as a few vendors pushed higher volumes of non-BIS compliant inventory.

“Now, companies that have decided to be in the space will be in the space and remain focused,” said Swipe India founder and chief executive officer Shripal Gandhi. He was referring to the initial period when companies by the dozen entered the market, only to fall by the wayside as demand fell. From a peak of 68 players competing in the market in the second quarter of 2013, the number has fallen to just over 30 now.

In the April-June quarter, only 34 domestic and international vendors shipped in tablets, of which only 10 shipped in significant volumes of more than 20,000 units each. Lava International co-founder SN Rai expressed confidence that serious players can look forward to sustained growth in sales.

While admitting that the market is not seeing much growth in the consumer retail segment, he said, “Education and enterprise sales are driving the overall growth and will continue to do so.”

Swipe’s Gandhi said the technological maturity of devices, declining price points and data needs of customers will drive consumer sales in coming quarters.

IDC analyst Karthik J said there is need for a strong differentiator to push tablet sales. "We have noticed new use cases such as POS devices, attendance systems and sales-force automation to drive enterprise demand in the recent past," he said. Gandhi said the upcoming festival season will further drive tablet sales.

CMR analyst Sachin Mehta said the tablet market has the potential for an exciting battle if Chinese brands can introduce function-rich models and establish top-of-mind presence through "smart" marketing tactics. "After smartphones, I expect these players will now focus on the tablets category and bring in quality at affordable price points for the discerning user," he said.